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Strata Management Archive – Stratarama

strata-meetings-your-attendance-and-voice-matter

Video Explainer – Strata Meetings – Your attendance and voice matter

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Think attending your AGM doesn’t matter?

Think again.

Your strata property is one of your biggest investments.

Strata meetings decide how much you pay each quarter, what gets fixed first, and even whether your neighbour gets approval for that renovation.

Can’t make it to the Strata meeting? No problem—but don’t skip your opportunity to vote by proxy. You can appoint a person to represent you and cast your vote.

Your vote might be the difference between getting a decision made or increasing levies to cover costs of having to reschedule the meetings.

Want something on the agenda? Contact your strata manager before the strata meeting to make sure it’s included. Don’t miss your chance to be heard.

Knowledge and communication are key. Make your vote count.

What Happens When You Don’t Pay Your Strata Fee

Simple Guide to Sinking Funds in Strata and Community Living

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Sinking Funds in Strata and Community Living

If you own a strata or community‑titled property, you’ve probably heard the term Sinking fund. Some States call it a capital works fund or maintenance fund, but the idea is the same everywhere: it’s a shared pool of money set aside for future repairs and major expenses. In South Australia, we call it a Sinking Fund.

This guide breaks down what Sinking funds are, why they matter, how levies work, and how owners can plan for long‑term maintenance without financial stress.

What Is a Sinking Fund?

A Sinking fund is a dedicated account used to pay for major future expenses in a strata or community‑titled property. A long‑term savings fund for the building if you will.

All owners contribute to this fund through regular levies. Depending on your Title and facilities, the money can be used for big‑ticket items such as:

  • Major roof repairs or replacement
  • Painting the exterior
  • Replacing gutters, fencing, or driveways
  • Lift / Fire System/ Security system upgrades or end of Life replacements
  • Garage door replacements
  • Other major works on or to common property
  • Agreed property improvements (such as installations that weren’t there prior, maybe a vehicle gate for example)

In South Australia, Sinking funds are legally required for Community Titled properties under the Community Titles Act 1996. While not mandatory under the Strata Titles Act 1988, they are strongly recommended, and owners must still consider long‑term costs when budgeting.

Sinking Fund vs. Administration Fund

It’s easy to confuse the two, but they serve different purposes:

Administration Fund

Used for day‑to‑day and regular running costs, such as:

  • Gardening
  • Cleaning
  • Insurance
  • Annual servicing of items (lift, fire, alarms, security systems, etc)
  • Minor repairs

 Sinking Fund

Used for long‑term, major expenses that don’t occur every year.

Having both ensures the corporation can manage routine costs while also preparing for future repairs without sudden financial shocks.

Why are Sinking Funds Important?

There are two main reasons Sinking funds matter:

  1. Legal Requirements

Some States require them by law, especially for larger or community‑titled schemes. In South Australia, as noted above, they are legally mandated by the Community Titles Act 1996.

  1. Practical Financial Planning

Without a Sinking fund, every major repair would require a special levy. A special levy means owners need to pay large, unexpected amount at short notice. Not only is this inconvenient, but it can also delay urgent repairs if owners can’t pay immediately. No one likes a large bill at short notice, so raising funds in smaller amounts is fairer for all owners whether new or old, as members are all contributing to the pool of funds over a long period of time.

A well‑funded Sinking fund ensures the corporation can act quickly and responsibly when maintenance is needed.

How Sinking Funds Work?

When you buy into a strata or community titled complex, you own your individual unit/lot, a shared interest in the assets of the Corporation (including funds in the account), plus a shared interest in the common property. The strata/ community corporation is responsible for maintaining it. The Corporation is made up of its members (the unit or Lot Owners).

Owners plan ahead by identifying which parts of the common property will need attention over the next 5–10 years (or longer). They then create a financial forecast — often called a Sinking fund plan — which outlines expected costs and a plan for saving money for this.

This long‑term planning helps smooth costs to aid with financial planning, to avoid sudden special levies, which can be stressful and expensive for owners.

What is the Common Property?

Common property can be confusing, but it generally includes anything outside the boundaries of individual units or lots. The definitions are different between Strata Titles Act 1988 and Community Titles Act 1996. In each, your property will be different to any other, and will be determined by the legislation, your property plans, and articles or by-laws.

Some examples include:

  • Exterior walls, roofs, balconies, and foundations
  • Fences, gates, and exterior painting
  • Shared wiring, plumbing, and drainage
  • Lifts and stairwells
  • Shared laundries, bin rooms, and car parks
  • Security systems
  • Gardens and driveways

Some structures—like garages or courtyards—may be exclusive‑use areas but still fall under common property rules depending on the plan.

The Sinking fund covers major maintenance on shared common property areas.

How Levies Are Set and Collected?

Levies are decided each year at the Annual General Meeting (AGM). Owners vote on the budget, which includes contributions to both the Administration fund and the Sinking fund.

Key points:

  • Levies are compulsory for all owners.
  • They are usually paid quarterly.
  • If levies aren’t paid, the corporation can take legal action and charge interest (up to 15% per year in some cases).
  • The amount each owner pays is usually based on Unit Entitlements, though some schemes use a flat fee.

Attending AGMs is the best way to understand how levies are set and to have a say in the budgeting process.

How Much Should Be in a Sinking Fund?

There’s no one‑size‑fits‑all answer, but good planning helps avoid shortfalls. A general opinion is that more is better, because maintaining your biggest asset is important, and costs continue to increase. Whilst some do simply pick an amount to put away, this rarely prevents a special levy. It often comes to fruition that those who put some planning into their levy contributions and stick to this, have sufficient funds available for major works as and when required.

Many corporations will engage professionals to prepare a Sinking fund assessment/ forecast, to provide a report. The up-front cost of this helps take away the guesswork, takes into account many of the points raised below.

If you’re estimating it yourself, consider these steps:

  1. Identify Future Expenses

List all major works expected over the next 10 years. An audit/ property inspection report/ plan of the property can help identify upcoming repairs.

  1. Estimate Costs

Get quotes or estimates for big items like roof replacement, painting, or driveway resurfacing. You can use this to aid in determining life-span of existing infrastructure, and future replacements.

  1. Review Past Costs

Previous repairs give a good indication of future needs.

For example: You painted previously and you don’t paint each year; when will the property need to be painted again to ensure the timber remains protected from the elements?

  1. Consider Inflation

Labour and materials increase in price over time, so factor this in. At minimum consider CPI annually on the items budgeted, but remember that the BCI (building cost index) shows costs increasing annually at a higher rate than CPI, so allowing for greater annual increases should be considered.

  1. Calculate Contributions

Work backwards from the total cost.

For example: If a $100,000 roof replacement is needed in 5 years, the fund must accumulate $20,000 per year. That’s just for this one line item only, so all other proposed repairs/ savings must also be added to the total. Divide this by the number of owners per their unit entitlement share to determine individual contributions each year / quarter.

  1. Stay Updated with Legislation

Rules around capital works planning vary by State and can change, as can the legislation around some of your maintenance items.

For example there could be a legislative change to a Fire system, that increases how or when certain items are maintained/ replaced which would require your plan to be amended.

How Sinking Funds Relate to Individual Lot Maintenance

Owners are responsible for maintaining their own lots. The Corporation only maintains common property. What is your lot and what is common, as mentioned, is determined by the Strata or Community Act and your plans and agreements.

If an owner lets their property fall into disrepair and it affects the building, the corporation can require repairs—and the owner must pay for them.

How Owners Can Use Sinking Fund Money

To spend money from the Sinking fund, owners must pass a formal motion at an AGM or an Extraordinary General Meeting (EGM). Depending on the expenditure and previous agreements, the Committee may also have authority to use these funds. Again depending on the Title of your Corporation, resolutions may also have spending limits per project; requiring a different type of motion; ordinary, special or unanimous (this is how many people must agree to it before it can proceed).

Once a project is approved, the Sinking fund can be used for that specific common property expense.

The goal is to spread the cost of major works over many years rather than hitting owners with sudden, large special levies.

What If the Sinking Fund Isn’t Enough?

The unexpected can arise OR the item you are budgeting for, may become critical sooner than expected.  Issues could also arise from under budgeting.

In these cases, owners may vote to raise a special levy to cover the shortfall. The group may also elect to use some of the funds allocated for other forward planned maintenance by readdressing the priorities.

Good planning helps avoid this situation, but having it’s a safety net when needed.

Final Thoughts

A Sinking fund is one of the most important financial tools in strata and community living. It protects owners from sudden costs, ensures the property stays in good condition, and supports long‑term financial stability.

By understanding how Sinking funds work—and by participating in your corporation’s decision‑making—you help safeguard the value of your property and the wellbeing of your community.

Strata Community Association 2021: Australiasia Conference & Awards

SCA Australasia: 2024-25 Strata Community Excellence awards

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Stratarama is pleased to announce our CEO; Tony Johnson FSCM was last week awarded the SCA AUSTRALASIA 2024-25 Strata Community Excellence award for Senior Community Manager.

Tony received this award in front of over 400 peers and delegates at the Australasian conference in Hobart Tasmania. Finalists from ACT, NSW, NZ, QLD, VIC & WA contested this category.

A finalist at an Australasian level for this category twice prior (and Strata Manager 3 times previously), Tony was recognised with the 24/25 award to the delight of several Stratarama Team Members in the audience and to the congratulations of the entire team at home in Adelaide.

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Lionel Colaco was also recognised as a Finalist in the category of Strata Community Manager of the year 24/25 following his South Australian win in this category in 2024. Whilst Lionel didn’t come home with the award this year, its important to mention how difficult it is for the judges to determine a winner, and to be in such a field from right around Australasia is such a huge credit to him and the organisation. We are all so very proud of Lionels contributions to the team and our clients.

buying-into-strata-the-report

Video Explainer – Buying into strata? The report

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Buying into a strata?

What is the Strata Report; Section or Search document?

  • Financial health—Are levies up to date? Are there special levies?
  • Maintenance history—Any major repairs coming or works placed on hold? 
  • Disputes—Are there ongoing issues in the building?”

This report forms part of the Form 1 document helping you to avoid surprises and make informed decisions Such as:

  • Can I keep a pet?
  • What are the insurances?
  • What is my share of costs?

Always ask questions before you buy. Learn more at Stratarama.com.au

No two Strata groups have the same costs, maintenance and levies

how-are-strata-levies-calculated

Video Explainer – How are strata levies calculated?

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How are strata levies calculated?

Let’s break it down!

Levies are based on the budget owners approval and can cover three key ways of raising funds:

  • Administrative Fund – For everyday/ year costs like gardening, cleaning, insurance, fire & lift contracts and bills.
  • Sinking Fund – long-term saving for projects like roofing or painting.
  • Special Levies – For unexpected or planned major expenses.

Each owner pays based on unit entitlements, basically a percentage, applied by the strata plan.

No two Strata groups have the same costs, maintenance and levies

What is a long term strata maintenance plan

Video Explainer – Long term Strata Maintenance Plan

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What is a Long-Term Strata Maintenance Plan?

A well-planned strata means fewer surprises!

That’s where a Long-Term Maintenance Plan comes in.

It outlines:

  • Future repairs and asset replacement – such as repairing or replacing gutters, roofs and much more
  • Estimated costs over multiple years broken down by item/ asset, setting recommended sinking fund levies— so levies stay predictable.

Planning ahead protects property value and avoids costly emergency repairs! Allowing Members to create a sinking fund of savings”

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Are Hot Water Services covered by Strata? South Australia.

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Do you own a unit/ apartment in a Strata Titled complex and ever wondered who is responsible for the Hot Water service?

The answer lies in whether or not the hot water supplied to your unit is from a “Common hot water service”. Hot water supplied to your unit may be supplied from a gas or electric Hot water service (HWS). Does this hot water service supply hot water to multiple units with-in your strata complex? Or does it supply water purely to your apartment?

If the hot water service is supplying hot water exclusively to your unit, then the costs to maintain, repair, service and replace this hot water service would be the responsibility of the unit Owner. A private hot water service which serves only one unit, may not necessarily be located in a private or subsidiary unit area, it could be located in a common area (perhaps a breezeway) or attached to a common external wall. The key element here is not the location, but who it exclusively serves.

If the hot water service is one which is supplying hot water to more than one unit then this hot water service would be a common hot water service. Just as other “common” items and areas are the responsibility of the Strata Corporation to collectively maintain, so too is the common hot water service the responsibility of the Strata Corporation.

STRATA TITLES ACT 1988

Part 2—Division of land by strata plan

Division 1—The strata plan

5—Nature of strata plan and requirements with which it must conform

(6) – The common property comprises—

(a) any land or space that is not within a unit;

(b) any pipe, cable, wire, duct or drain that is not for the exclusive use of a unit;

(c) any structure that is not for the exclusive use of a unit installed before the deposit of the strata plan;

(d) any structure installed by a strata corporation as part of the common property;

(e) any other structure on the site committed to the care of a strata corporation as part of the common property.

Is the Strata Hot Water Service covered by Strata Insurance?

The short answer is that the hot water service will be covered by the strata insurance as part of the Strata building insurance cover. This does not mean however that you have a claim with respect to your hot water service. The same as any building insurance claim, there must have been a claimable event for which you are seeking the insurer to assist you with. By this we mean; if the issue you have with your hot water service is one of general service, old age, general wear and tear, then there is no claim, and the same as any other maintenance item, the repairs (or replacement) required on the hot water service will remain the responsibility of the hot water service Owner.

If, however, the hot water service was stolen, or damaged in a building fire/ storm, then you may find that depending on the conditions and excesses applicable to your individual Strata building policy, that this could be a claimable matter, which could be lodged via your Strata Manager, insurance Broker or Presiding Officer (whichever is applicable to your Strata Corporation).

Alternatively, damages to the hot water service itself may not be a claim, however water damages caused as a result of an unexpected leak, may potentially form part of a claim. It is also possible in such instance, that the Strata Building Insurance may need to work side by side with an Owners contents Insurer.

Can I relocate my Hot water service?

The relocation of your individual hot water service would be at the cost of the unit owner whom owns and has exclusive use of the hot water service.

Relocating the Hot water service, may require the consent of the Strata Corporation Members depending on the resolutions previously passed by your Strata Corporation and the location that you wish to move it. For example, if you wish to relocate it to a common wall and/ or the group has not previously passed a blanket resolution in regards to where Members can relocate their HWS then this would require the consent of the Corporation by passing an appropriate resolution in accordance with the Strata Titles Act 1988.

This would be the same as say replacing and relocating an existing tank style Hot water services for perhaps a roof mounted solar hot water service.

Can I replace my Hot water service with a different sized/ shaped unit?

The replacement of your individual hot water service would as discussed above be at the cost of the unit owner whom owns and has exclusive use of the hot water service.

If you were replacing your Hot water service with the same style and shape unit (i.e an instantaneous for another instantaneous unit, or a water tank the same size, for another the same size) then this would not require the consent of the Strata Corporation. As this is effectively a maintenance item, where you are not changing the appearance or attachments to the building. If you are seeking to replace the Hot water service with a different style/ type, then you may require the consent of the Strata Corporation Members depending on the resolutions previously passed by your Strata Corporation and the changes being sought. For example, if you wish to replace your instantaneous unit to a large style water tank attached to the wall and such changes have not previously been passed a blanket resolution in regards to doing so, then this would require the consent of the Strata Corporation by passing an appropriate resolution in accordance with the Strata Titles Act 1988.

Every Strata Corporation (and Community Corporation) is different, made up of different people and different past precedents. It is in your best interest always before undertaking any works to the property (particularly external works), to initially reach out to your Presiding Officer or Strata Manager to discuss the works you are seeking and find out what action may or may not be required from you.

You may also find that similar works have been approved in the past and the Strata Corporation may have a Plumber or Contractor familiar with your site and the works required that can be asked to provide you with a quote.

Looking to change Managers? Stratarama is here to assist you every step of the way. Contact us by clicking on the link for an obligation-free proposal. Wanting to come on board? Our friendly team will arrange a smooth transfer from start to finish, assisting and guiding you on all the steps.

Who can be a Strata Manager_by Stratarama

Strata Management Practice Standard

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Strata Community Association (SCA) developed a Strata Management Practice Standard (SMPS), which Strata Management businesses who are SCA members are able to submit to in order to highlight their professional standing in the strata and community management industry. ​

A voluntary practice standard, the SMPS is for strata community management businesses, in relation to their own internal procedures as well as contractual relationships with strata communities.

Through an independent audited process, the SMPS recognises businesses that have developed and adhered to their documented internal processes. These are implemented to ensure best practice with regards to trying to improve client satisfaction and also to ensure proper internal business processes.

At the writing of this, only 15 Strata and Community Companies in Australia have committed to and subjected their business to the audit process and become Certified SMPS Strata management businesses.

Stratarama SMPS Certificate

Stratarama are very pleased to be a leader in this area, becoming the first (and to date, only) SMPS Certified Strata and Community Management Business servicing South Australian Strata and community titled properties.

We believe that along with maintaining our internal systems, processes and guides, by choosing to have these audited by third party auditors, as arranged by the Strata Community Association (SCA), we are able to provide confidence to our clients and those who may be seeking a change in management. Submitting to meet this certification highlights our commitment to be transparent and ethical in all our dealings both with our clients and also our team.

SMPS Certification we believe offers:

  • peace of mind for existing and prospective clients knowing the business’s policies, procedures and accounts are audited annually
  • a beneficial training tool for employees, providing employee certainty and promotes retention of our team
  • provides a point of difference

In 2023, Stratarama were also the first South Australian Business to take the Respect Pledge. The SMPS certification and the commitment to the SCA respect pledge are just some ways in which Stratarama aim to show our commitment to clients and delivering upon our standards.

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